Dale Schafer Law News – 5/19/22

#cannabisbanking – “The letter doesn’t specifically endorse the Secure and Fair Enforcement (SAFE) Banking Act—which is a major component of a debate playing out in a bicameral conference committee where lawmakers are seeking to attach the legislation’s language to a large-scale manufacturing bill. But it does say that the “lack of safe banking and financial services for the cannabis industry and for those indirectly involved in cannabis marketplaces has become a dire public safety issue.”
“Virtually all our member states and territories have been negatively impacted by the lack of available financial and banking services for cannabis businesses and those working with the cannabis industry,” it says.”

https://www.marijuanamoment.net/state-marijuana-regulators-say-banking-fix-will-make-their-jobs-easier-in-addition-to-helping-businesses/

#californiacannabis – “The Woodland City Council conducted a public hearing Tuesday to determine whether to amend the city’s zoning code to allow for cannabis retail use….
The city currently allows up to six commercial cannabis conditional use permits in the industrial districts for cannabis manufacturing, distribution and testing, according to the report. Proposed amendments will establish standards for the review and approval of retail cannabis uses….
Additionally, the council adopted a resolution to update regulatory permit fees related to cannabis businesses….
Proposed renewal fees for dispensaries would include a $19,621 annual fee — the highest out of all the cannabis uses permitted in the city…..
The council voted 3-1 to adopt the resolution updating the city’s regulatory permit fees related to cannabis businesses and directing city staff to return to the council with a proposed ballot measure for the Nov. 8 election to establish a cannabis business tax in Woodland.”

https://www.dailydemocrat.com/2022/05/18/woodland-city-council-holds-public-hearing-on-cannabis-dispensaries/

#cannabisindustry – “Failure to include marijuana-specific language to leases may result in one or both of the parties being locked into a lease that inadvertently violates state marijuana law and may result in regulatory enforcement actions or criminal charges against a party….
Landlord’s right of entry clauses are formulaic and usually require the landlord to provide reasonable notice, for the entry to occur during a reasonable time of day, and only to occur under reasonable conditions. In the context of a marijuana business tenant, these terms and conditions may conflict with state marijuana regulatory rules regarding a non-marijuana licensee’s unauthorized access to restricted marijuana licensed premises….
Another critical component to a marijuana commercial lease is the ability for landlord and tenant to modify the lease to the minimum extent necessary in the event a regulatory authority identifies any issues with the lease that may result in lease rejection. Despite the parties’ best efforts, this may happen, and they would need to have a provision in place to address this issue without having to resort to termination of the lease.”

https://www.jdsupra.com/legalnews/two-fundamental-clauses-in-a-commercial-9103317/

Please don’t forget that if your Distribution vehicles are required to have Motor Carrier Permits, they are still technically held to the same standards.
#cannabisdistribution – “At worst, if a driver fails just one drug test, that can be grounds for termination under DOT regulations. At best, they are temporarily taken off the road and required to complete an evaluation with a substance misuse professional who determines their rehabilitation process, which can sometimes take months.
As of January 2020, employers are also required to list commercial drivers who fail a drug test in the FMCSA’s Drug & Alcohol Clearinghouse. These violations remain searchable for five years. Potential employers are also required to check the Clearinghouse to see if a commercial driver had any previous violations, which would prevent them from being hired.”

https://www.wpri.com/news/national/marijuana-violations-have-taken-over-10000-truck-drivers-off-the-road-this-year-adding-more-supply-chain-disruptions/

Dale Schafer Law News – 5/19/22

#cannabisbanking – “The letter doesn’t specifically endorse the Secure and Fair Enforcement (SAFE) Banking Act—which is a major component of a debate playing out in a bicameral conference committee where lawmakers are seeking to attach the legislation’s language to a large-scale manufacturing bill. But it does say that the “lack of safe banking and financial services for the cannabis industry and for those indirectly involved in cannabis marketplaces has become a dire public safety issue.”
“Virtually all our member states and territories have been negatively impacted by the lack of available financial and banking services for cannabis businesses and those working with the cannabis industry,” it says.”

https://www.marijuanamoment.net/state-marijuana-regulators-say-banking-fix-will-make-their-jobs-easier-in-addition-to-helping-businesses/

#californiacannabis – “The Woodland City Council conducted a public hearing Tuesday to determine whether to amend the city’s zoning code to allow for cannabis retail use….
The city currently allows up to six commercial cannabis conditional use permits in the industrial districts for cannabis manufacturing, distribution and testing, according to the report. Proposed amendments will establish standards for the review and approval of retail cannabis uses….
Additionally, the council adopted a resolution to update regulatory permit fees related to cannabis businesses….
Proposed renewal fees for dispensaries would include a $19,621 annual fee — the highest out of all the cannabis uses permitted in the city…..
The council voted 3-1 to adopt the resolution updating the city’s regulatory permit fees related to cannabis businesses and directing city staff to return to the council with a proposed ballot measure for the Nov. 8 election to establish a cannabis business tax in Woodland.”

https://www.dailydemocrat.com/2022/05/18/woodland-city-council-holds-public-hearing-on-cannabis-dispensaries/

#cannabisindustry – “Failure to include marijuana-specific language to leases may result in one or both of the parties being locked into a lease that inadvertently violates state marijuana law and may result in regulatory enforcement actions or criminal charges against a party….
Landlord’s right of entry clauses are formulaic and usually require the landlord to provide reasonable notice, for the entry to occur during a reasonable time of day, and only to occur under reasonable conditions. In the context of a marijuana business tenant, these terms and conditions may conflict with state marijuana regulatory rules regarding a non-marijuana licensee’s unauthorized access to restricted marijuana licensed premises….
Another critical component to a marijuana commercial lease is the ability for landlord and tenant to modify the lease to the minimum extent necessary in the event a regulatory authority identifies any issues with the lease that may result in lease rejection. Despite the parties’ best efforts, this may happen, and they would need to have a provision in place to address this issue without having to resort to termination of the lease.”

https://www.jdsupra.com/legalnews/two-fundamental-clauses-in-a-commercial-9103317/

Please don’t forget that if your Distribution vehicles are required to have Motor Carrier Permits, they are still technically held to the same standards.
#cannabisdistribution – “At worst, if a driver fails just one drug test, that can be grounds for termination under DOT regulations. At best, they are temporarily taken off the road and required to complete an evaluation with a substance misuse professional who determines their rehabilitation process, which can sometimes take months.
As of January 2020, employers are also required to list commercial drivers who fail a drug test in the FMCSA’s Drug & Alcohol Clearinghouse. These violations remain searchable for five years. Potential employers are also required to check the Clearinghouse to see if a commercial driver had any previous violations, which would prevent them from being hired.”

https://www.wpri.com/news/national/marijuana-violations-have-taken-over-10000-truck-drivers-off-the-road-this-year-adding-more-supply-chain-disruptions/

Dale Schafer Law News – 5/18/22

#californiacannabis – “Due to the violation of the nursery license, approximately 22,000 cannabis plants associated with the nursery were eradicated. Approximately 15 pounds of untagged, packaged cannabis bud were seized and destroyed.”

https://kymkemp.com/2022/05/17/licensed-cultivator-gets-busted-for-selling-plants-to-undercover-cops-illegally/

#californiacannabis – ““Eliminating the cultivation tax is a huge improvement, but since the original budget announcement, more details have been released that suggest that the proposal would raise the excise tax to 19% by 2025,” Ross Gordon, policy director at the Humboldt County Growers Alliance (HCGA) and policy chair at the Origins Council, told the Outpost this week. “…The industry as a whole is struggling to compete with the illicit market, and a tax increase, even a delayed one, is only going to make us less competitive.”
If that provision stays, it would result in “a significant net tax increase on the industry and consumers,” even with the elimination of the cultivation tax, he said.”

https://lostcoastoutpost.com/2022/may/17/we-need-actual-meaningful-tax-reform-state-budget/

#cannabispolitics – “From the Justice Department’s perspective, a “state-law order that compels third parties to directly subsidize petitioners’ possession of marijuana on a medical-use rationale” would amount to overriding legislative intent consistent with the CSA, it said.”

https://www.marijuanamoment.net/justice-department-tells-supreme-court-to-reject-marijuana-case-while-acknowledging-legalization-momentum/

#californiacannabis – “In the Newsom administration’s proposal for the budget year starting in July, the governor called for removing the cannabis cultivation tax of $161 per pound of flower. Under the plan, the missing tax dollars would be made up by increasing the state’s cannabis excise tax from 15% to 19% after three years.”

https://www.ganjapreneur.com/california-gov-proposes-cannabis-industry-tax-cut/

Dale Schafer Law News – 5/18/22

#californiacannabis – “Due to the violation of the nursery license, approximately 22,000 cannabis plants associated with the nursery were eradicated. Approximately 15 pounds of untagged, packaged cannabis bud were seized and destroyed.”

https://kymkemp.com/2022/05/17/licensed-cultivator-gets-busted-for-selling-plants-to-undercover-cops-illegally/

#californiacannabis – ““Eliminating the cultivation tax is a huge improvement, but since the original budget announcement, more details have been released that suggest that the proposal would raise the excise tax to 19% by 2025,” Ross Gordon, policy director at the Humboldt County Growers Alliance (HCGA) and policy chair at the Origins Council, told the Outpost this week. “…The industry as a whole is struggling to compete with the illicit market, and a tax increase, even a delayed one, is only going to make us less competitive.”
If that provision stays, it would result in “a significant net tax increase on the industry and consumers,” even with the elimination of the cultivation tax, he said.”

https://lostcoastoutpost.com/2022/may/17/we-need-actual-meaningful-tax-reform-state-budget/

#cannabispolitics – “From the Justice Department’s perspective, a “state-law order that compels third parties to directly subsidize petitioners’ possession of marijuana on a medical-use rationale” would amount to overriding legislative intent consistent with the CSA, it said.”

https://www.marijuanamoment.net/justice-department-tells-supreme-court-to-reject-marijuana-case-while-acknowledging-legalization-momentum/

#californiacannabis – “In the Newsom administration’s proposal for the budget year starting in July, the governor called for removing the cannabis cultivation tax of $161 per pound of flower. Under the plan, the missing tax dollars would be made up by increasing the state’s cannabis excise tax from 15% to 19% after three years.”

https://www.ganjapreneur.com/california-gov-proposes-cannabis-industry-tax-cut/

Dale Schafer Law News – 5/17/22

#californiacannabis – “Commercial cannabis operators told the county they are frustrated with the current compliance inspection process because they experience frequent inconsistencies between inspection staff, explaining one inspector will call out a violation that another will not. The operators said there is a significant cost for them to obtain permits and complete construction required to cure violations.
The operators said they believe there is parity between them and traditional agriculture and the county’s approach to regulating both industries should be similar. Operators said they believe that the rigorous application of regulations to an emerging industry is affecting their ability to remain in business in Monterey County.”

https://www.montereyherald.com/2022/05/16/monterey-county-board-of-supervisors-to-receive-report-on-cannabis-regulations/

#cannabispolitics – “U.S. Department of Transportation (DOT) policies on drug testing truckers and other commercial drivers for marijuana are unnecessarily costing people their jobs and contributing to supply chain issues, a congressman said in a letter to the head of the department on Monday.
Rep. Earl Blumenauer (D-OR) cited DOT data showing that tens of thousands of drivers are being disqualified because of stringent drug screening policies around THC. He said that while nobody wants drivers impaired on the roads, there aren’t tests that can detect active impairment—so people are being penalized for using cannabis while off duty, days or weeks before they’re tested….
The congressman told Transportation Secretary Pete Buttigieg that his department “should rapidly reform requirements for testing drivers and returning them to service, as well as develop an accurate test for impairment.””

https://www.marijuanamoment.net/congressman-urges-transportation-department-to-reform-marijuana-testing-policies-for-drivers/

Dale Schafer Law News – 5/17/22

#californiacannabis – “Commercial cannabis operators told the county they are frustrated with the current compliance inspection process because they experience frequent inconsistencies between inspection staff, explaining one inspector will call out a violation that another will not. The operators said there is a significant cost for them to obtain permits and complete construction required to cure violations.
The operators said they believe there is parity between them and traditional agriculture and the county’s approach to regulating both industries should be similar. Operators said they believe that the rigorous application of regulations to an emerging industry is affecting their ability to remain in business in Monterey County.”

https://www.montereyherald.com/2022/05/16/monterey-county-board-of-supervisors-to-receive-report-on-cannabis-regulations/

#cannabispolitics – “U.S. Department of Transportation (DOT) policies on drug testing truckers and other commercial drivers for marijuana are unnecessarily costing people their jobs and contributing to supply chain issues, a congressman said in a letter to the head of the department on Monday.
Rep. Earl Blumenauer (D-OR) cited DOT data showing that tens of thousands of drivers are being disqualified because of stringent drug screening policies around THC. He said that while nobody wants drivers impaired on the roads, there aren’t tests that can detect active impairment—so people are being penalized for using cannabis while off duty, days or weeks before they’re tested….
The congressman told Transportation Secretary Pete Buttigieg that his department “should rapidly reform requirements for testing drivers and returning them to service, as well as develop an accurate test for impairment.””

https://www.marijuanamoment.net/congressman-urges-transportation-department-to-reform-marijuana-testing-policies-for-drivers/

Dale Schafer Law News – 5/13/22

#californiacannabis – San Diego – “San Diego County voters will be asked to authorize a tax system for marijuana businesses in the unincorporated areas on the November ballot, after the Board of Supervisors this week approved a marijuana tax ordinance…
“We recommend that local tax rates be set to try to keep the cumulative rate at or below 30 percent,” he said. “The development of the program itself should be value neutral to the county. That leaves any revenue generated by the cannabis tax available for whatever spending priorities the board may choose: public safety, health and social services, roads and infrastructure, social equity issues or any other government services.””

https://www.sandiegouniontribune.com/news/politics/story/2022-05-12/san-diego-voters-to-consider-cannabis-tax-on-november-ballot

#cannabisresearch – “Colin Nuckolls, a chemist out of Columbia University in New York, has an upcoming study that compares the genetics of indoor versus outdoor cannabis flower. What he’s found in that study, Nuckolls told me, “is that outdoor cannabis has a great number and quantity of terpenes than indoor in a comparison of genetically identical plants for two different strains.””

https://www.forbes.com/sites/lindseybartlett/2022/05/12/huckleberry-hill-farms-on-whats-at-stake-for-legacy-cannabis-growers/?sh=6010eba148e1

Dale Schafer Law News – 5/10/22

#californiacannabis – Humboldt – “Ultimately, the report lists seven recommendations, which we’ll paraphrase below:
The county should pay to upgrade the Accela system so applicants can complete the application, including payment, online, thereby reducing the need for them to physically come into the Planning and Building office.
The county should pay to improve Accela so that employees in Planning and Building can complete more tasks, including reviews, calculations, permitting and reporting.
The county should pay to “fully implement Accela to a level which enables Public Works to meet its specific needs.” (This one is a bit redundant, perhaps.)
In the county’s Citizen Access Portal, the Planning and Building Department should give the public specific instructions on how to search a location without creating an account in Accela or contacting the Planning and Building staff.
When the Planning and Building Department gets notified that a state provisional license has been approved or denied, staff should immediately act on the corresponding interim cannabis permits.
For applications pending more than 30 days, the Planning and Building Department should notify applicants what they need to do for approval.
Before the end of the year, Public Works employees need to conduct actual verification that a roadway meets Category 4 requirements.”

https://lostcoastoutpost.com/2022/may/9/civil-grand-jury-calls-improvements-modernizations/

#californiacannabis – “Dicus’ deputies stopped Empyreal’s vans on three occasions in November, December, and January, making off with a total of $1.1 million. The joint statement avers that the deputies “are not highway robbers as previously reported in the media.” But that remains a fair characterization, since the businesses whose proceeds the deputies stole and Empyreal itself were operating in compliance with state law.
Money earned by state-licensed marijuana businesses is not subject to forfeiture under California law. Dicus therefore transferred the loot to the FBI, seeking federal “adoption” of the seizures, which would have allowed his department to claim up to 80 percent of the money under the Justice Department’s “equitable sharing” program. That adoption fell through once the department agreed to give the money back.”

https://reason.com/2022/05/09/sheriff-agrees-to-stop-stealing-cannabis-cash-from-armored-cars-saying-his-deputies-are-not-highway-robbers/

Dale Schafer Law News – 5/6/22

#californiacannabis – “Vertical integration was the name of the game when California launched its recreational marijuana market in 2018, as companies handled everything from cultivation to retail sales and home delivery.
Four years later, small and large operators across the state are unloading assets, shuttering business lines and letting coveted licenses expire in order to cut costs and narrow their focus in the world’s largest marijuana market.”

https://mjbizdaily.com/california-cannabis-companies-sell-assets-narrow-focus-to-save-money/

#californiacannabis – “Regulatory costs, high taxes, and local bans on retailers are the main factors impeding the transition to a legal market, according to a new report from Reason Foundation, the organization that publishes this website. The report, written by Geoff Lawrence, the foundation’s managing director of drug policy, focuses on the latter two issues. It recommends tax relief, which Lawrence shows would be compatible with continued growth in state marijuana revenue, and incentives aimed at encouraging local governments to allow retail sales.”

https://reason.com/2022/05/05/a-new-report-explains-how-california-screwed-up-marijuana-legalization/

#californiacannabis – “Currently, cannabis companies in California face some of the steepest tax rates in the country. The 36-page report, titled “The Impact of California Cannabis Taxes on Participation within the Legal Market,” found that by removing some of that tax burden, licensed operators would be able to price their products more competitively with the unregulated marketplace, thus drawing in more customers and ultimately, more tax revenue for the state.”

https://www.ganjapreneur.com/report-removing-cultivation-tax-would-double-californias-cannabis-tax-revenues/

Dale Schafer Law News – 5/5/22

#californiacannabis – “”Restricting access to cannabis = increased opioid addiction and suicide.” That’s the message commuters driving down Miramar Road in Mira Mesa are seeing, thanks to a billboard placed by military veterans’ advocacy group, Weed for Warriors….
“California and the nation’s, veterans are dying at horrific rates from opioid addiction and suicide. A lack of local access to safe, legal medical cannabis in San Diego threatens the livelihood of veterans who depend on this medication,” said Sean Kiernan, CEO of Weed for Warriors. “Local control has severely disrupted access to a product that veterans rely on. Despite serving their country overseas, the state’s legal cannabis prohibition demonstrates veterans are being left behind.””

https://www.benzinga.com/markets/cannabis/22/05/26995316/new-billboard-in-san-diego-highlights-lack-of-legal-medical-cannabis-access-for-veterans-in-san-

#californiacannabis – “As a measure to protect cannabis consumers from untested and unregulated product at unlicensed businesses, two Los Angeles City Council members introduced a motion Wednesday aimed at implementing a county program that issues emblem placards to licensed cannabis businesses.
Under the County of Los Angeles’ Emblem Program for Authorized Cannabis Stores, storefront and delivery cannabis businesses are able to apply for an emblem, obtain the requisite inspection and place the emblem on their premises in an area visible to someone outside the store.”

https://mynewsla.com/government/2022/05/04/la-city-council-members-seek-to-implement-emblem-program-for-cannabis-stores/

#cannabisindustry – “The Controlled Substances Act (CSA) identifies the cannabis plant and all its derivatives as a Schedule 1 controlled substance. Schedule 1 controlled substances have a “high abuse potential with no accepted medical use,” and they cannot be “prescribed, dispensed, or administered.” Because cannabis remains classified as a Schedule 1 controlled substance, the CSA “imposes strict controls on possession, manufacturing, distribution, and dispensing” of cannabis.
Under the Money Laundering Control Act of 1986 (MLCA) and the BSA as amended, covered banks and NBFIs are prohibited from providing financial services to businesses that are engaged in illicit activities. Because federal law prohibits the distribution and sale of cannabis, financial transactions involving CRBs are therefore deemed to be transactions that involve funds derived from illegal activities….
The growing divide between federal prohibition and state legalization of the cannabis industry creates a precarious position for federally regulated banks and NBFIs with the main concern involving exposure to legal, operational and regulatory risk. The situation begs the question: How might the federal government and regulators pursue and prosecute players in the legal cannabis industry?”

https://cannabisindustryjournal.com/feature_article/cannabis-banking-the-ins-the-outs-the-unknowns/

#cannabisindustry – “A recent ruling from the U.S. Bankruptcy Court for the District of Arizona serves as another reminder that federal bankruptcy courts are hostile territory for cannabis companies and their operators.  Ryan Mayer filed a bankruptcy case under Chapter 13 of the U.S. Bankruptcy Code, seeking to reorganize his personal debts and liabilities.  In a Chapter 13 bankruptcy, an individual proposes a plan to re-pay all or a portion of his debts.  The amount to be repaid depends on how much he earns, the amount and types of debt owed, and how much property he owns.  As a general rule, debtors must use all monthly disposable income to re-pay their debts.
Mayer was the president and a major shareholder of Rosinbomb.  Although not plant-touching, Rosinbomb derived most revenue from the manufacture and nationwide sale of extraction and processing equipment within the state-legal cannabis industry.  And all Mayer’s income came from Rosinbomb….
Unfortunately for Mayer, the Court found there was no credible evidence to support his claims that sufficient income could be generated from equipment sales to federally-lawful hemp and other non-cannabis customers and that the inheritance claimed by Mayer was speculative.  The Court dismissed the case, finding that Mayer’s only reliable source of income came from a business whose operations violate the CSA, since Rosinbomb’s business activities themselves amount to the sale of federally illegal cannabis paraphernalia under the CSA.”

https://www.wardandsmith.com/articles/even-indirect-income-from-cannabis-can-get-you-banned-from-bankruptcy